Research shows women are better savers than men after adjusted earnings, which suggests the gender pay gap is one of the most important factors contributing to the divide between genders in retirement.
This is according to research from Nest Insight and Vanguard published in a report titled How the UK Saves.
The study, which analyses the choices, demographics, behaviours and likely outcomes of the nearly 6.5 million members of the workplace pension scheme, showed that the median savings balance for females (£174) in the master trust is 76 per cent of the median balance for males (£228).
However, after adjusting for earnings, women have higher median contributions and higher median account balances in all but the highest earnings band, where the difference was negligible, the report stated.
For workers earning between £10,000 and £14,999 annually, female median contributions and account balances were 26 and 20 per cent greater than males, respectively.
William Allport, senior retirement strategist at Vanguard and one of the authors of the study, argued that “after controlling for earnings, women appear to be saving more than men, within the Nest arrangement”.
He said: “It’s a very interesting finding, and a subject we’ll be researching further.”
Several pensions experts have told FTAdviser this research sheds new light on the impact of pay inequality on pensions.
Jessica List, pensions technical manager at Curtis Banks, argued the fact that women are saving more as a percentage of their earnings but still achieving lower balances than men shows the effect the gender pay gap is having.
Rachel Vahey, product technical manager at Nucleus, claimed that it is vital the UK continues its drive to address the gender pay gap, and as this begins to narrow the pension savings made by women should increase.
She said: “This research shows women already have the savings habit, and that is an important part of the battle to increase savings in the UK.”
Kate Smith, head of pensions at Aegon, agreed that gender pay inequality is the main cause of the pension savings gender gap adding "women earn less so they save less”.
She said: “This widens with age, compounded by women disrupted working patterns.
“And it’s not helped by auto-enrolment, which disproportionately excludes more women than men from workplace pensions due to low earnings.”
Ms Smith argued, however, that people shouldn’t be carried away by Nest’s research results, as the scheme “focuses on average to low earners and isn’t representative of the whole of the market.”
Recent analysis from Aegon showed the gap between men and women’s saving pots grows dramatically with age, and will result in women being considerably worse off in retirement.
A survey conducted by Prudential showed that women’s expected retirement income has hit a record high, but they will still have an average retirement income £4,900 lower than men if they retire this year.
Romi Savova, chief executive of fintech provider PensionBee, noted that it “is encouraging to see women taking action to close the gap through additional contributions, suggesting women are better savers”.